Nichols’ Tax Update Podcast- Issue 21-32

  1. IRS Urges EIN Holders to Update Responsible Party Information
    • The IRS, citing security issues, has urged (IR-2021-161) entities with employer identification numbers to update their applications if there has been a change in the responsible party or con  [ IR-2021-161, 7/30/2021]
  1. Debtor’s Entire Refund Is Property of Bankruptcy Estate
    • A U.S. bankruptcy court applied the withholding rule and held that a debtor’s entire 2018 joint income tax refund is property of his bankruptcy estate, finding that the debtor earned all of the income that year and made all of the tax payments, so no amount of the refund should go to his non-debtor spouse. [In re: Kent Culp; Bnk Ct E MI S Div., No. 20-52558, 7/29/2021]
  1. Advance Child Tax Credits Hurtling Toward 2022 ‘Train Wreck’
    • The Biden administration is thrilled with the rollout of advance child tax credit (CTC) monthly payments that began flowing in July, but that enthusiasm isn’t shared by tax return preparers. [Tax Notes Today, 8/3/2021, article by Jonathan Curry]
  1. Court Refuses to Exclude Evidence in Criminal Tax Case
    • A U.S. district court denied the government’s motion to exclude a CPA’s expert testimony in the trial of an individual indicted for failing to pay payroll taxes for his businesses and failing to file personal income tax returns and denied the individual’s motion to exclude his unsigned returns, documents regarding his sale of a business interest, and IRS account transcripts. [United States v. Dale Vernon Thrush; D Ct E MI N Div.,No. 1:20-cr-20365, 7/30/2021]
  1. Eleventh Circuit Affirms Author Is Liable for Self-Employment Taxes
    • The Eleventh Circuit, in an unpublished opinion, affirmed a Tax Court decision that held a best-selling crime fiction author liable for self-employment taxes, finding that the Tax Court did not err in holding that all of her income from publishing was derived from her trade or business of writing and subject to self-employment taxes. [K. Slaughter;  CA 11, No. 20-10786, 8/3/2021]
  1. IRS Provides ERC Guidance for Start-Ups, Distressed Employers
    • The IRS and Treasury have responded to some remaining uncertainties for employers — including “recovery start-ups” — that want to claim the employee retention credit provided in the coronavirus pandemic response laws. [Tax Notes Today; 8/5/2021, article by Caitlin Mullaney]
    • IRS Provides ERC Guidance for Last Two Quarters of 2021
      • The IRS has provided guidance (Notice 2021-49) on the employee retention credit under section 3134, which was added by the American Rescue Plan Act of 2021 to provide a credit to eligible employers for qualified wages paid after June 30, 2021, and before January 1, 2022. [Notice 2021-49; 2021-34 IRB 1, 8/4/2021]
  1. IRS Issues Practice Unit on Reportable Transactions Penalty
    • The IRS has issued a practice unit on the penalty imposed by section 6707A on taxpayers who fail to disclose any reportable transactions information that is required under section 6011 to be included on a return or statement. [ PEN-P-003; 8/4/2021, 36 page slide show]

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 I have relied on Tax Analysts® to provide reliable and timely analysis of Federal tax developments for over 30 years. The “headnotes” you see here are from “Tax Notes Today” In my opinion, the preeminent source of accurate information and thoughtful analysis of important developments and trends in Federal taxation.

(*** identifies item with useful analysis of current issue but not covered in Lynn’s recorded commentary due to complexity and time required for fair comment.)